Redundancy law changed for laid-off employees
Legislation to give businesses more time before they have to make laid-off staff redundant has been approved in the House of Assembly.
Jason Hayward, the Minister of Labour, said the amendments would help to keep Bermudians employed by protecting businesses from collapse.
Mr Hayward said: “Forcing companies into bankruptcy, which is the alternative for many businesses without the amendment, will be a net destroyer of jobs.
“Removing jobs from the economy cannot be the consequences of a government that is trying to restore economic growth.”
The Employment Amendment Act 2020 will maintain the requirement for employees laid off for more than four months to be made redundant and paid off. But the three months from April 1 to June 30 will not be included in the four-month period.
Hotels had asked for changes to the maximum layoff period before redundancy kicked in after the Covid-19 crisis forced the closure of properties across the island.
The Bermuda Hotel Association said in a letter to David Burt, the Premier, that if the law remained unchanged, “businesses, including a percentage of our member properties, will be forced to permanently close their doors with a catastrophic and negative impact on our economy”, as well as an increase in unemployment.
Sylvan Richards, the Shadow Minister of Home Affairs, said that the Opposition supported the legislation given the circumstances facing the island.
He added that while the legislation will particularly benefit the hospitality sector, it will cover other businesses that were forced to shut their doors and lay off staff because of the pandemic.
Derrick Burgess, the Deputy Speaker, said the island’s unions would keep an eye on those businesses whose employees are made redundant with the intention of rehiring them next year.
Mr Burgess said the concern was that when they are rehired, that they would return without benefits entitled to them for their experience.
He said: “Once they take the severance pay, if they are called back, they will start as a new employee. Their vacation entitlement will be that of a brand new employee.”
Michael Dunkley, an OBA backbencher, said the island had done well to tackle the health threat of Covid-19, but the economic threat will continue until next year.
He said the amendments were “kicking the can down the road”, adding: “What happens in October?
“What happens when November comes, when typically the hotels really start pulling back?
“We support it, but in my view in a few months we are going to have to come back and try to do something else.”
Mr Dunkley said he believed in the future of the island’s economy, but longer-term solutions need to be found.
Tinée Furbert, a PLP backbencher, however said that the Covid-19 pandemic was completely unprecedented so a measured approach was sensible.
Ms Furbert urged employers to communicate with their staff and be up front if they are only being laid off or if they would be made redundant.
Scott Pearman, the Shadow Minister of Legal Affairs, said the Government had missed an opportunity to update the root legislation.
He said the original section was badly written and fails to specify what benefits are offered for workers while they are laid off.
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